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You buy a 30-year bond today that pays a 6% coupon (bonds are usually denominated in $1,000's so you will get $60 per year, almost
You buy a 30-year bond today that pays a 6% coupon (bonds are usually denominated in $1,000's so you will get $60 per year, almost instantaneously the Federal Reserve Bank announces an interest rate hike which now means that the same bond would be issued with a 6% coupon (in other words the required rate of return for the bond has changed). So how much do you lose if you were to sell your bond the next day? Hint: you are solving for a PV and 6% is your rate or "I
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